On November 26, 2024, President-elect Donald Trump’s announcement of additional tariffs on imports from China, Mexico, and Canada exerted pressure on major global currencies, including the Euro, British Pound, and Japanese Yen.
The GBP/USD pair fell by 1.01% to 1.2571, while EUR/USD weakened by 1.01% to 1.5022. The USD/JPY pair decreased by 0.49%, reaching 153.953. These movements reflect the growing complexities in currency trading, influenced by geopolitical dynamics as well as fundamental data.
Trump's aggressive tariff stance has strengthened the Dollar Index (DXY), which rose to 107. However, the index saw a slight decline following his nomination of Scott Bessent as Treasury Secretary, which provided some market stability.
Analysts indicate that these trade policies could significantly impact the US dollar, with potential repercussions for consumer costs and market volatility. The Euro remains under pressure due to economic uncertainties in the Eurozone, exacerbated by geopolitical tensions and expectations of a 25 basis point rate cut from the European Central Bank (ECB).
The British Pound is hovering near a six-month low, influenced by disappointing economic data, including a 0.7% drop in retail sales in October and rising annual inflation at 2.3%. The Bank of England is expected to maintain stable interest rates in December.
Meanwhile, the Japanese Yen has remained relatively stable around 154 per US dollar, bolstered by expectations of accommodative monetary policy from the Bank of Japan (BoJ). Analysts project potential appreciation for the Yen if the BoJ continues its current policy stance.
Overall, the interplay between global economic conditions, central bank policies, and geopolitical developments will shape the outlook for major currencies against the US dollar.